The long-term goals of this proposal are to understand the role of sphingolipids in cell differentiation and proliferation. The sponsor's laboratory has characterized a novel signal transduction pathway whereby vitamin D3 and TNF-alpha were shown to activate a neutral sphingomyelinase which hydrolyzes sphingomyelin to ceramide and phosphorylcholine. Ceramide inhibits cell proliferation and induces differentiation. Our laboratory has recently identified a serine/threonine protein phosphatase which is activated by ceramide and is likely to be its direct molecular target. Yeast molecular genetics provide a powerful tool for dissecting this signal transduction pathway and isolating the involved proteins. The specific aims of this project are therefore: (Phase I) 1. To determine the effects of ceramide on Saccharomyces cerevisiae biology and proliferation. Preliminary results show that ceramide has a static effect on S. cerevisiae growth. This effect will be characterized by determining a) ceramide dose response and time course; b) specificity in comparison to other lipids, detergents and long-chain bases; c) toxicity effects; and d) cell cycle arrest phenotype. 2. To establish the existence of a ceramide-activated protein phosphatase (CAPP) in S. cerevisiae. Assays of crude yeast cytosolic extracts indicate the presence of a ceramide-activated phosphatase. this activity will be characterized by determining a) protein dependence; b) ceramide dose response; c) response to known phosphatase inhibitors; and d) the role of this activity in mediating the ceramide biological response. (Phase II) 3. To isolate and characterize the specific proteins involved in the ceramide response. this is a long-term goal which will be initiated during Phase II of this proposal. Initially, the relationship of this phosphatase to other known yeast phosphatases will be examined by screening existing phosphatase mutant strains for the presence of CAPP. If this approach does not identify CAPP as a known phosphatase, isolation of genes involved in the ceramide pathway will then be performed by identifying yeast colonies resistant to the growth- inhibitory action of ceramide. Mutants thus isolated will be categorized as having dominant or recessive mutations; the recessive mutations will be assigned to complementation groups; and the genes involved in the pathway will be determined through complementation by transformation with a yeast genomic library.